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Simple Interest, SMB-021

The graph below shows the growth in value of a $1000 investment over a period of four years.
 

A different amount of money is invested under the same investment conditions for eight years.

In total, the amount of interest earned on this investment is $600.

Calculate the amount of money invested.   (3 marks)

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`$1500`

Show Worked Solution

`text(The linear graph shows a simple interest rate is applied.)`

`text{Simple interest rate} = 50/1000 xx 100=5text(% p.a.)`

`I = 600,\ \ r = 5/100,\ \ n=8`

`600` `= P xx 5/100 xx 8`
`:.P` `= 600/0.4`
  `= $1500`

Simple Interest, SMB-020

Chardie invests a sum of money in an account paying simple interest at a rate of 5.25% per annum.

No withdrawals or deposits are made into the account and over 4 years and the total value of Chardie's investment grows to `$22\ 385`.

Calculate the sum of money Chardie originally invested.   (3 marks)

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`$18\ 500`

Show Worked Solution

`text{Interest earned}\ = 22\ 385-18\ 500=$3885`

`I = 3885, \ \ r = 5.25/100, \ \ n = 4`

`I` `= Prn`
`3885` `= P xx 5.25/100 xx 4`
`P`  `= 3885/0.21`
  `= $18\ 500`

Simple Interest, SMB-019

A sum of money is invested in an account paying simple interest at a rate of 5.0% per annum.

No withdrawals or deposits are made into the account and over 3 years, with the total interest earned on the investment being $120.

Calculate the sum of money originally invested. (2 marks)

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`$800`

Show Worked Solution

`I = 120, \ \ r = 5/100, \ \ n = 3`

`I` `= Prn`
`120` `= P xx 5/100 xx 3`
`P`  `= 120/0.15`
  `= $800`

Simple Interest, SMB-018

Wilbur invests a sum of money into an account paying simple interest at a rate of 4.25% per annum.

The total interest earned on Wilbur's investment over 4 years is $6800.

Calculate the sum of money Wilbur originally invested.   (2 marks)

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`$40\ 000`

Show Worked Solution

`I = 6800, \ \ r = 4.25/100, \ \ n = 4`

`I` `= Prn`
`6800` `= P xx 4.25/100 xx 4`
`P`  `= 6800/0.17`
  `= $40\ 000`

Simple Interest, SMB-017 MC

A sum of money is invested in an account paying simple interest at a rate of 8% per annum.

The total interest earned on this investment over 6 years is $27 000.

The sum of money invested is

  1. `$12\ 960`
  2. `$45\ 000`
  3. `$56\ 250`
  4. `$202\ 500`
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`C`

Show Worked Solution

`I = 27 \ 000, \ \ r = 8/100, \ \ n = 6`

`I` `= Prn`
`27 \ 000` `= (P xx 8 xx 6)/100`
`P`  `= (2\ 700\ 000)/48`
  `= $56\ 250`

 
`=>  C`